Now Is No Time to Stop Buying Stocks

April Fool! We aren't going anywhere.

Brian Richards
Brian Richards
Apr 2, 2008 at 12:00AM

Although the market seemed to love David and Tom Gardner's announcement that we'd stop covering stocks for six months -- it opened up nearly 2% on the news -- we're here to set the record straight: It was an April Fool's Day joke, folks. The Motley Fool isn't going anywhere.

And though it's no joke that we enjoy cocktails, great philosophical questions, and revolutionary sitcoms, now as ever, we believe that the stock market is the best wealth-growing vehicle that exists for average Americans. Like it or not, we're here to talk stocks, funds, and finance for the next six months -- and beyond.

That said, we hope you enjoyed this year's joke and that you'll appreciate the punch line even more.

Step aside, Shakespeare
We may be a mostly Shakespearean outfit 'round these parts, but it was Chaucer's monk who said, "Oft in jest have I heard truth." The modern translation: There's truth in every joke.

See, we Fools are investors writing for other investors. Like you, we're tired of market volatility. Like you, we don't like watching our stocks bleed. Like you, we hate seeing our portfolios shrink. We realize that it's tempting to give up for six months and call it a day, but we also know that building wealth in the stock market needs time and temperament as much as it requires good ideas.

We also know that market gyrations are inevitable. Ever since tulip mania caused the Amsterdam Stock Exchange to panic and crash in 1636, public markets worldwide have been beset by boom and bust cycles. In fact, according to data from the Leuthold Group, the U.S. has been in a bear market 34% of the time over the past century.

Not only can we not ignore these cycles, but there's no reason to!

Market downturns and you
If we accept downturns as a fact of investing, we'll know not to panic, sell everything, and stick our savings in a Mason jar. Moreover, because many investors do just that (well, except for the Mason jar), this type of stock market volatility can give patient, long-term-focused investors the opportunity to buy great companies at great prices.

As Warren Buffett has said, "It is optimism that is the enemy of the rational buyer." So take advantage of market pessimism to build your portfolio for the long term. Then hold those positions tenaciously over time. According to Fool co-founder (and strategy-game enthusiast) David Gardner, that's the greatest investing secret of all.

Seriously ...
We're long-term investors here at The Motley Fool, so we welcome current volatility and will dedicate not only the next six months but also our entire careers to helping our community of investors find the best long-term buys that the market has discarded.

And although recent volatility, in a historical context, isn't all that bad -- the market fell more than 80% during the course of The Great Depression, after all -- it could easily get worse. Our economy is clearly slowing and suffering from falling housing prices, bank writedowns -- see the UBS (NYSE: UBS) $19 billion announcement just yesterday morning -- and a tightened credit market.

What's more, despite the recent drop, valuations are not no-brainers across the board. Even though S&P 500 components such as Intuit (Nasdaq: INTU), Apollo Group (Nasdaq: APOL), Adobe (Nasdaq: ADBE), and Apple (Nasdaq: AAPL) all dropped more than the broader market did in the first quarter, they continue to trade at premium multiples. Yet there are some outrageously cheap stocks out there, and we should all be stalking a great company like Apple to see whether the stock will fall further.

You might also consider looking abroad for investment opportunities. Because as the U.S. economy slows, China looks to post gross domestic product growth of 8% to 10% this year, and the likes of India, Vietnam, and Brazil are not far behind. Our colleague Bill Mann will even go so far as to tell you that you must own international stocks.

Where to from here?
The market's been crazy lately, but now's no time to bury your head in the sand. We'll be here at sleeping and eating the public markets (figuratively speaking), with our ceaseless aim to educate, amuse, and enrich.

Your next moves should be to breathe deeply, steel your stomach, and look to build out positions in the world's great companies. Buy stocks -- but be diligent, and buy only when you believe them to be cheap. If you're looking for additional guidance, keep reading our website, checking out our premium publications, or even emailing our analysts. Let's get through the current market volatility and profit together.

So, from David and Tom Gardner, the two of us, and everyone here at The Motley Fool, we hope you had a great April Fool's Day, and Fool on! Now, let's go talk stocks.